FacebookTwitterGoogle+RedditEmail

A Corporate (Crime) State

 

What Business Week magazine calls “the corporate crime wave” shows every sign of worsening, as more major corporations scramble to admit massive deception of investors, looting of pension funds, self-enrichment of top executives, restatement of earnings and giant farewell compensations packages to departing bosses who wrecked their companies to further their own megagreed.

So much of these corporate cesspools are oozing into the public’s view that it is difficult to piece them into an understandable reform movement for workers, consumers and investors to support. The sanitation trucks can’t begin to keep up with the spilling garbage of betrayed trust, pillage and plunder of trillions of dollars.

“Is Wall Street Corrupt” headlined Business Week? Inside the reporters showed the answer to be yes, yes, yes! The founder of the giant Vanguard Mutual Fund, John C. Bogle, declared “Our capitalistic system is in peril,” and just started a shareholder-rights group with Warren E. Buffett. What communism could not do, the big business bosses are doing to the market system and the financial industry.

We are witnessing the corporate destruction of capitalism in favor of a corporate state. The law can’t save it because the laws are controlled by politicians many of whom are controlled in turn by these same business interests and campaign cash. For every honest Congressman Henry Waxman and Senator Paul Sarbanes, there are scores of Congressional and White House politicians huddling with business lobbyists to stifle prosecutions, reforms and investigations.

The lead culprit is the retiring and shameless Senator Phil Gramm (Rep. Texas) whose wife just resigned from the Enron Board and its audit committee. On May 16th, he met with 30 corporate lobbyists to plan the surrender of Washington, D.C.’s national government against the crookery of Wall Street.

In American history, reforms usually followed scandals. Now over the past twenty years, scandals follow scandals because there are no reforms.

Sometimes the Congressional reaction is to weaken the existing laws and safeguards against corporate crime, fraud and abuse a even after imposing massive taxpayer bailouts of the culpable industries. Remember the S&L scandals that are costing taxpayers half a trillion dollars in principal and interest between 1990 and 2020.

Conflicts of interest are at epidemic levels in Wall Street and trust is being destroyed a the key confidence that investors must have in information and advice directed their way. A devastating new report a that has received little notice a by the only major non-conflicted ratings firm left in the country (Weiss Ratings, Inc. from Palm Beach Gardens, Florida) concludes:

1. “A deeper understanding of the crisis can be achieved through an analysis of “buy,” “sell,” and “hold” ratings issued to companies that went bankrupt in 2002: A total of 50 investment banking and brokerage firms issued ratings to 19 companies that filed for chapter 11 in the first four months of 2002…. 94% of the 50 firms continued to indicate that investors should buy or hold shares in failing companies right up to the day these companies filed for bankruptcy. Among the 19 bankrupt companies, 12 continued to receive strictly “buy” or “hold” rating on the date of bankruptcy filing.”

Weiss Ratings receives no financial compensation from the companies it rates, unlike S&P, Moodys, and Duff & Phelps. Here are its unbiased ratings. “Among the 20 largest brokerage firms, 13 may be financially vulnerable if their finances deteriorate further, while seven have the financial wherewithal to withstand a severely adverse business environment.”

Weiss Ratings gives low grades to JP Morgan Chase & Co, Lehman Brothers, Merrill Lynch, UBS Warburg LLC, Barclays Capital, Credit Suisse First Boston Corp. These firms have millions of customers who relied on their highly self-advertised, objective expertise. (For more details see http://www.weissratings.com)

There needs to be an aroused public to take control of their government and direct their public servants, before the November elections, to enact systemic action for reform, not phony legislation that allows crooked business as usual. For suggestions on what these reforms can be, log on to http://www.citizenworks.org

Ralph Nader is the author of Crashing the Party.

 

More articles by:

Ralph Nader is a consumer advocate, lawyer and author of Only the Super-Rich Can Save Us! 

September 25, 2018
Kenneth Surin
Fact-Finding Labour’s “Anti-Semitism” Crisis
Charles Pierson
Destroying Yemen as Humanely as Possible
James Rothenberg
Why Not Socialism?
Patrick Cockburn
How Putin Came Out on Top in Syria
John Grant
“Awesome Uncontrollable Male Passion” Meets Its Match
Guy Horton
Burma: Complicity With Evil?
Steve Stallone
Jujitsu Comms
William Blum
Bombing Libya: the Origins of Europe’s Immigration Crisis
John Feffer
There’s a New Crash Coming
Martha Pskowski
“The Emergency Isn’t Over”: the Homeless Commemorate a Year Since the Mexico City Earthquake
Fred Baumgarten
Ten Ways of Looking at Civility
Dean Baker
The Great Financial Crisis: Bernanke and the Bubble
Binoy Kampmark
Parasitic and Irrelevant: The University Vice Chancellor
September 24, 2018
Jonathan Cook
Hiding in Plain Sight: Why We Cannot See the System Destroying Us
Gary Leupp
All the Good News (Ignored by the Trump-Obsessed Media)
Robert Fisk
I Don’t See How a Palestinian State Can Ever Happen
Barry Brown
Pot as Political Speech
Lara Merling
Puerto Rico’s Colonial Legacy and Its Continuing Economic Troubles
Patrick Cockburn
Iraq’s Prime Ministers Come and Go, But the Stalemate Remains
William Blum
The New Iraq WMD: Russian Interference in US Elections
Julian Vigo
The UK’s Snoopers’ Charter Has Been Dealt a Serious Blow
Joseph Matten
Why Did Global Economic Performance Deteriorate in the 1970s?
Zhivko Illeieff
The Millennial Label: Distinguishing Facts from Fiction
Thomas Hon Wing Polin – Gerry Brown
Xinjiang : The New Great Game
Binoy Kampmark
Casting Kavanaugh: The Trump Supreme Court Drama
Max Wilbert
Blue Angels: the Naked Face of Empire
Weekend Edition
September 21, 2018
Friday - Sunday
Alexandra Isfahani-Hammond
Hurricane Florence and 9.7 Million Pigs
Andrew Levine
Israel’s Anti-Semitism Smear Campaign
Paul Street
Laquan McDonald is Being Tried for His Own Racist Murder
Brad Evans
What Does It Mean to Celebrate International Peace Day?
Nick Pemberton
With or Without Kavanaugh, The United States Is Anti-Choice
Jim Kavanagh
“Taxpayer Money” Threatens Medicare-for-All (And Every Other Social Program)
Jonathan Cook
Palestine: The Testbed for Trump’s Plan to Tear up the Rules-Based International Order
Jeffrey St. Clair
Roaming Charges: the Chickenhawks Have Finally Come Back Home to Roost!
David Rosen
As the Capitalist World Turns: From Empire to Imperialism to Globalization?
Jonah Raskin
Green Capitalism Rears Its Head at Global Climate Action Summit
James Munson
On Climate, the Centrists are the Deplorables
Robert Hunziker
Is Paris 2015 Already Underwater?
Arshad Khan
Will There Ever be Justice for Rohingya Muslims?
Jill Richardson
Why Women Don’t Report Sexual Assault
Dave Clennon
A Victory for Historical Accuracy and the Peace Movement: Not One Emmy for Ken Burns and “The Vietnam War”
W. T. Whitney
US Harasses Cuba Amid Mysterious Circumstances
Nathan Kalman-Lamb
Things That Make Sports Fans Uncomfortable
George Capaccio
Iran: “Snapping Back” Sanctions and the Threat of War
Kenneth Surin
Brexit is Coming, But Which Will It Be?
FacebookTwitterGoogle+RedditEmail